# In the matter of Sidharth Bharatbhushan Jain & Ors. vs. State Bank of India & Ors.

> NCLAT judgment dated 2024-10-14. Citation: TCN-2024-NCLAT-00162. The appeal challenges an order dated 09.11.2023 by the National Company Law Tribunal (NCLT),…

- **Court:** NCLAT
- **Order date:** 14 Oct 2024
- **Citation:** TCN-2024-NCLAT-00162
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/sidharth-bharatbhushan-jain-ors-vs-state-bank-of-india-ors-fd69f690

## Summary

### Background

The appeal challenges an order dated 09.11.2023 by the National Company Law Tribunal (NCLT), Ahmedabad, which allowed an application under Section 43 of the Insolvency and Bankruptcy Code (IBC). The appellant argued that the Corporate Debtor had supplied goods to M/s Pratap Associates, an HUF firm of Appellant No.3, making them a related party. The outstanding amount for these goods, supplied before 23.05.2018, was Rs.7,78,31,555/-. The Corporate Debtor, M/s Sysco Industries Ltd, entered Corporate Insolvency Resolution Process (CIRP) on 8th September, 2021, with the look-back period under Section 43 commencing on 8th September, 2019.

## Facts

M/s Sysco Industries Ltd (Corporate Debtor) supplied goods to M/s Pratap Associates, an HUF firm of Appellant No.3. The outstanding amount as of 23.05.2018 was Rs.7,78,31,555/-. M/s Sysco Industries Ltd entered CIRP on 8th September, 2021. The application under Section 43 of the Code was filed based on the minutes of the 4th COC Meeting dated 14.12.2021. The NCLT allowed the application under Section 43, directing respondents to deposit the outstanding amount. The appellant contested the extension of the look-back period beyond two years. The key fact is the date of the transaction (before 23.05.2018) relative to the CIRP commencement date (08.09.2021), which determines the applicability of Section 43.

## Issues and analysis

### Issue 1: Whether the transactions between the Corporate Debtor and M/s Pratap Associates fall under the …

**Ratio:** Section 43 of the IBC deals with preferential transactions. Sub-section (4) specifies the

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**Reasoning:** The court reasoned that since the outstanding amount was more than two years prior to the

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**Interpretation:** Section 43(4) of the IBC defines the 'relevant time' for determining

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**Application:** In this case, the transactions occurred before 23.05.2018, while the CIRP

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## Parties

- **Judges:** Yogesh K…; Ajai Das Me…
- **Appellants:** Sidharth Bharatbhu…
- **Respondents:** M/S. SYSCO…; State Bank of…

## Timeline

- **2018-05-23 — Goods Sup…**: Goods were supplied by the Corporate Debtor to M/s Pratap Associates before this date,…
- **2021-09-08 — CIRP Commen…**: M/s Sysco Industries Ltd, the Corporate Debtor, entered Corporate Insolvency Resolution…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 43 — Preferential transactions and relevant time](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-43)

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